Milacron, Inc.

CDG Role: Company’s Financial Advisor for Restructuring and M&A Services

Background

  • Milacron, Inc. (“Milacron” or “the Company”) provides equipment, supplies, services, and end-to-end solutions to the plastics processing industries. It also supplies industrial fluids to the metalworking industries.
  • The Company was forced to file for Chapter 11 protection in March 2009 due to:
    • Insufficient liquidity in order to make its $13 million bond interest payment due on May 15, 2009
    • The Company had also been struggling to make  ongoing payments on its legacy defined benefit pension plan
    • The Company’s various business lines were  adversely affected by the economic downturn, with sales down as much as 35% in key markets
  • Milacron had debt outstanding in excess of $290 million at the time of filing.
  • CDG was retained as financial advisor to the Company.

 Issues

  • Continued declines in revenue and an under-funded pension liability made it increasingly difficult for the Company to meet its financial obligations.
  • In the twelve month period leading up to the Filing, the Company’s credit agreements had been amended extensively on numerous occasions.
  • The Company’s working capital issues continually strained liquidity.
  • High cost of manufacturing in US required assessment of transferring manufacturing operations overseas.
  • Limited strategic interest in acquiring the Company and limited financing alternatives in a credit strained economic environment made it difficult to secure DIP financing.

 Value to Client

  • Assisted in negotiations with lenders and bondholders for $135 million in DIP financing to assist in stabilizing the Company through the Chapter 11 process.
  • Assisted the Company in the evaluation of a multi-path process to assess the value of the following:
    • Sale to strategic or financial acquirer
    • Assessment of transferring manufacturing operations overseas
    • Refinancing of capital structure to fund existing business
  • In addition to evaluating strategic alternatives CDG helped the Company to better manage its short-term liquidity and enhance its working capital position.
  • Ultimately, CDG assisted in structuring of the sale of substantially all of the assets of Milacron to an investment consortium led by Avenue Capital Group and DDJ Capital Management in August 2009.